Variation might be the spice of life, but it can be the death of a complex construction project operating on tight margins.

No matter how methodically you’ve planned a project and how carefully you’ve spec’d out materials and labor costs, change will inevitably occur. Change or variation orders are where a lot of highly complex construction projects bog down.
Construction Project Variations: Causes and Statistics
When we evaluate construction change order and variation management, it’s important to consider the common causes of variation orders including:

-the scope or the schedule of the project has changed
-the equipment needed to perform a task is unavailable
-the project owner or contractor is suffering financial difficulties
-there are conflicts between contract documents
-working drawings are inadequate or incomplete
-changes in design by consultants
-a shortage of skilled manpower
-a shortage of quality materials
-shoddy workmanship, requiring demolition and rework
-delays in procuring building materials
-poor weather conditions or natural disasters
-a lack of strategic planning

Even if you manage to avoid most of these, your projects will inevitably experience some of them. As the time needed to complete the project goes up, the cost spikes, and the quality of the work may be compromised.

A 2012 study of more than 220 large construction projects by the American Society of Civil Engineers found that 4 out of 10 suffered cost and time overruns, in large part thanks to variation orders. And the more changes that are required, the more productivity suffers, as owners are forced to choose between approving overtime, hiring additional workers, or suffering project delays.

A crucial element is timing; researchers found that the faster a variation order was dealt with, the less impact it had on productivity and cost. But the only way to know how efficiently variations are being handled is to have a standard way to measure it across all project partners.

This is where Aconex can help.

How to Improve Project Variation Management and Workflow

In a traditional model, a subcontractor may submit a request for variation to the head contractor, who then must get it approved by the contracts administrator. If the client approves the request, that information is passed down the chain to the subcontractor. This cycle, can require 21 days to complete, but may take much longer, especially if the parties involved are relying on Excel spreadsheets and email to manage the flow of communications.

By contrast, with Aconex, your variation workflow and correspondence is captured in the one place. This provides you with a more efficient process, complete set of information and an effortless way to report on activity, so there’s no misunderstanding regarding changes.

The Aconex Insights module displays all your variation activity on a single screen. You can see how many variations that are pending, and which have been approved or rejected. You can generate reports on the average time required to resolve each variation request, and identify which contractors initiate the most change orders and create the most delays.

By gaining visibility into the status of all variations across all your project partners, you’re able to measure performance and institute a process of continual improvement. After adopting a collaborative platform, some Aconex clients have been able to cut their cycle times by as much as 80 percent.

Some things you simply can’t control. But you can control how long it takes to communicate the need for variations, validate, and resolve them in an effective matter.

That’s the kind of change anyone would welcome.

Source: How To Keep Construction Project Variations Under Control

Find out how public-private partnerships (PPPs) and joint ventures are constructing China’s One Belt, One Road (OBOR). signaling its intent to fund high-profile transportation infrastructure projects to spur economic development and promote trade.By 2015, the government had announced 1,043 projects totaling $318 billion in value and promised to streamline approvals and offer tax breaks for public-private partnerships (PPPs or P3s) in public services.

The importance of accountability and transparency

This trend of seeking private investment to build infrastructure assets without huge public capital expenditures began in the 1990s in the United Kingdom and then spread steadily throughout the West. In Asia, however, a lack of confidence in emerging regulatory frameworks, inconsistent risk allocation and the need for a dependable pipeline of credible projects greatly inhibited private investment. With OBOR, however, China has the opportunity to break new ground, as the country looks to reinforce its position as the world’s largest construction market and infrastructure investor.

The rise of public-private partnerships and joint ventures has expanded opportunities for firms across the construction industry, particularly in Asia. Projects that would be too big or risky for a single firm can become a good financial bet when tackled by a consortium. The key to attracting private investors in a large infrastructure project like those associated with OBOR lies in the ability of project owners, planners, developers and operators to structure and execute projects in a way that allows for ownership, risk and expertise to be shared. And, the quickest way to accomplish this goal is to partner with companies that have a proven track record of enabling P3s to deliver the highest levels of accountability and achieve complete transparency.

The best collaboration platform for a P3 and joint venture

In March 2008, the Hong Kong International Airport Authority awarded Cathay Pacific Services (CPSL) a franchise to design, build, finance, and operate a new air cargo terminal under a 20-year agreement. CPSL, in turn, awarded the construction contract to two of the city’s biggest contractors, Gammon and Hip Hing. Instead of storing project information on one of the contractor’s in-house systems, the joint venture agreed to keep everything on Aconex. The decision to use a third-party platform guaranteed that the partners would retain control of their information no matter what happened to the joint venture. At the same time, Aconex made it easy to share information of all types, regardless of file size.

In the United States, the Colorado Department of Transportation (CDOT) and the High Performance Transportation Enterprise (HPTE) – a division of CDOT that operates as an independent, government-owned business – were looking for a partner to manage information and processes for multiple CDOT highway infrastructure projects. The US 36 Express Lanes project was the state’s first P3 venture and came at a cost of roughly US$500-million.

Initially, the project team for US 36 used enterprise file-sharing software that combined content management and document functionality. Unfortunately, the software didn’t handle large engineering documents well, and managing essential project processes like bidding became time-consuming and onerous. The HPTE began looking for a new document management solution. Although familiar with Aconex as a result of its use on the Denver RTD FasTracks initiative, the team conducted an independent evaluation, reviewing multiple commercial options.

The importance of information and process control

Aconex emerged as the best fit for the project because of the information and process control that it extended across every organization on the team. At first, Aconex was only utilized for document management. However, it quickly became clear that the benefits of a single, neutral collaboration platform like Aconex were particularly well suited to projects requiring innovative financing by multiple public and private stakeholders. There were no limits on the number of files, the size of files or the types of files managed by Aconex, making it easy to share large engineering documents and multidimensional building information models (BIM). Finding information was easy, too, using metadata-based web search tools with keywords.

In addition, the project team found Aconex intuitive to use and learned it quickly. The success demonstrated by the US 36 team has helped encourage adoption of Aconex on several other HPTE highway projects. Even stakeholders who were initially resistant to change perceived the benefits of a platform that ensured that everyone worked the same way and followed the same processes.

In the end, Aconex was able to help CDOT and the HPTE mitigate risk, avoid costly overruns, delays and supply chain breakdowns, ultimately delivering additional value to taxpayers while implementing systematic project management processes for managing all elements of a complex P3 project from beginning to end.

The need for alternative delivery continues to grow

Opportunities abound in Asia for companies that can demonstrate the ability to provide both transparency and control. Aconex offers a platform where real collaboration on OBOR projects is possible, risk is shared and reciprocal trust can be forged. If you’d like to discuss an upcoming or ongoing OBOR project, or some of the challenges you’re facing, please reach out to me!

Source: OBOR: Alternative Project Funding and Delivery Methods

As anyone who works in the oil and gas industries knows, major capital projects in the energy sector are exceedingly complex undertakings. Developing a refinery, oil field, or gas plant usually involves dozens of parties across multiple countries. A survey of 100 projects by Aconex found that most involve more than 500 participants from 29 organizations. On average, these users exchange more than 300,000 documents and 400,000 pieces of correspondence; all told, in excess of 1.2 million decisions must be made before each project is complete.With numbers like that, it’s not surprising that project managers, engineers, and executives would choose to rely on an EPC’s document management and collaboration system. And while that may seem like an easier solution, as well as the most expedient, it’s a decision that project owners usually come to regret.

What usually happens is a project owner will rely on the EPC’s system to manage communications to and from the EPC. Also, they will then use a variety of technologies such as email, shared drives, FTP sites, and spreadsheets to track the flow of documents internally and for communication with other parties.

The system may work fine at first. However, over time, project owners will find themselves unable to keep pace with the exponential growth and complexity of the data being generated. This puts more pressure on project administrators and document control personnel, as they struggle to keep up with the plethora of documents and manual processes while still adhering to contractually prescribed project milestones. The result: incomplete oversight and lower quality work, as stressed out personnel become more prone to committing errors.

In addition, there will always be scope that is the owner’s responsibility, not the EPC’s. The EPC’s management and collaboration system may not contain the information an owner requires or track every process that needs to be managed. Project owners may be forced to create yet another set of manual registers and processes, adding even more complexity.

This can result in poor project governance, schedule delays, and cost overruns. These, in turn, may drive contractual disputes – a situation not uncommon in the energy industry, where the sums of money involved can be significant.

Project owners may reasonably object that they lack the expertise, time, and budget to implement and manage their own systems. That’s a valid concern; in-house systems can take six months or longer to become operational. Aside from significant investments in software development, owners must also hire IT personnel to configure, customize, and deploy servers; train personnel how to use the system; offer end-user support; and provide adequate disaster recovery methods to ensure continuous availability.

And that is why a cloud-based collaboration platform is really the ideal compromise. By configuring pre-made templates, owners can achieve total control over a project’s data, with far greater speed than a traditional in-house system and at a fraction of the cost. Server deployment and disaster recovery come as part of the package. Training and support are generally included with a cloud-based platform, ensuring high rates of adoption and compliance with business processes. Owners are able to measure and fine-tune processes across the entire project, and the existence of a single neutral source of truth allows disputes to be settled far more easily.

Oil and gas cloud-based collaboration systems are a cost effective means of quickly putting in place the processes owners need to efficiently manage their projects. But it’s important they make the decision to deploy this solution as early as possible in the project lifecycle, to lay the foundation for seamless project oversight and strong governance.

Source: Laying Foundations in the Oil and Gas Industry for Effective Project Oversight